Steep drop in unemployment rate spawns conspiracy

FILE - In this Sept. 27, 2006 file photo, former General Electric CEO Jack Welch addresses students at the Massachusetts Institute of Technology, in Cambridge, Mass. Conspiracy theorists came out in force Friday, Oct. 5, 2012, after the government reported a sudden drop in the U.S. unemployment rate one month before Election Day. Welch tweeted his skepticism five minutes after the Labor Department announced that the unemployment rate had fallen to 7.8 percent in September from 8.1 percent the month before. (AP Photo/Elise Amendola, File)

WASHINGTON — Sasquatch might as well have traipsed across the White House lawn Friday with a lost Warren Commission file on his way to the studio where NASA staged the moon landing.

Conspiracy theorists came out in force after the government reported a sudden drop in the U.S. unemployment rate one month before Election Day. Their message: The Obama administration would do anything to ensure a November victory, including manipulating unemployment data.

The conspiracy was widely rejected. Officials at the Labor Department said the jobs figures are calculated by highly trained government employees without any political interference. Democrats and even some Republicans said they also found the charges implausible.

Yet that didn’t stop the chatter. The allegations were a measure of how politicized the monthly unemployment report has become near the end of a campaign that has focused on the economy and jobs.

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The conspiracy erupted after former General Electric CEO Jack Welch, a Republican, tweeted his skepticism five minutes after the Labor Department announced that the unemployment rate had fallen to 7.8 percent in September from 8.1 percent the month before.

“Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers,” Welch tweeted, referring to the site of Obama campaign headquarters.

The drop in unemployment was announced two days after Obama’s lackluster performance in his first debate with Republican challenger Mitt Romney.

Republican Rep. Allen West of Florida soon announced via Facebook that he agreed with Welch.

“Somehow by manipulation of data we are all of a sudden below 8 percent unemployment, a month from the presidential election,” West wrote. “This is Orwellian to say the least.”

The Obama administration wasn’t given much time to gloat about the strong economic improvement. Instead, it had to defend statisticians and economists against accusations made without any supporting evidence.

“No serious person ... would make claims like that,” said Alan Krueger, chairman of the White House Council of Economic Advisers.

The jobs report is prepared under tight security each month by a relatively obscure government agency — the Bureau of Labor Statistics — without any oversight or input from the White House. It is based on data collected by an army of census workers, who interview Americans in 60,000 households by telephone or door-to-door.

Eight days before the unemployment rate is made public, the bureau’s office suite goes into lockdown. Tom Nardone, a 36-year veteran at the agency who oversees preparation of the report, keeps crucial papers in a safe in his office.

A big reason for the security has nothing to do with politics. The data could move financial markets if it were released early.

“These are our best-trained and best-skilled individuals,” Labor Secretary Hilda Solis said on CNBC. She called the claims of manipulation “ludicrous.”

The BLS, the statistical division of the Labor Department, collected and analyzed data and calculated the unemployment rate before Wednesday night’s presidential debate.

Joel Naroff, president of Naroff Economic Advisors, said that it’s “not that unusual” for the rate to move by three-tenths of a percent in one month. It’s happened 12 times in the past 10 years.

“In other words, at least once a year, you should expect that large a move,” he said in an email to clients. It last happened 20 months ago, “so we were overdue. That is just the reality of the data.”

Romney didn’t discredit the government data. But plenty of conservatives did that work for him.

Conn Carroll, an editorial writer at the Washington Examiner, tweeted: “I don’t think BLS cooked numbers. I think a bunch of Dems lied about getting jobs. That would have same effect.”

Rick Manning, communications director of Americans for Limited Government and the former public affairs chief of staff at the Labor Department, said “anyone who takes this unemployment report serious is either naive or a paid Obama campaign adviser.”

Rep. Paul Broun, a Maryland Republican, weighed in with a statement saying the report “raises questions for me, and frankly it should be raising eyebrows for people across the country.”

Economists offered more plausible reasons for skepticism. A big chunk of the increase in employed Americans came from those who had to settle for part-time work: 582,000 more people reported that they were working part-time last month but wanted full-time jobs.

Conspiracy theories are nothing new for Obama. He has been dogged by discredited claims that he wasn’t born in this country and that he is Muslim.

“Stop with the dumb conspiracy theories. Good grief,” Tony Fratto, who worked for President George W. Bush, weighed in on Twitter.

It wasn’t just the political elite commenting. Angelia Levy, a researcher at the Federal Judicial Center, the research arm of the federal judiciary, told her 588 Twitter followers that Welch’s comments were “unbelievable.”

“All of the sudden they’re questioning this data that’s been reported for decades,” the Democrat said in a phone interview. “It’s so hypocritical and ridiculous.”

Justin Wolfers, a professor of business and public policy at the University of Pennsylvania’s Wharton School and research associate at the National Bureau of Economic Research, went on Twitter to say Welch “just labeled himself an idiot.”

In a follow-up phone call, Wolfers said the economists who calculate the monthly jobs report “are nerds who spend their lives crunching numbers for the public service. To impute their integrity is outrageous.”

The agency has been in the political glare before.

In 1971, President Nixon took aim at it after a top official, Howard Goldstein, publicly attributed a steep drop in unemployment to largely technical factors. The administration reorganized the agency and installed several officials in newly created positions. That led to charges from Democrats that the GOP administration was politicizing the bureau.

Welch said later in the day in a Fox News interview: “I don’t know what the right number is, but I’ll tell you, these numbers don’t smell right when you think about where the economy is right now.”